Archives for Tax

New GST rules for low-value imported goods

From 1 December 2019 overseas businesses selling low-value goods to consumers in New Zealand must charge GST at the point of sale if they meet the GST registration requirements, including a NZ$60,000 turnover threshold.

Low-value goods are physical goods valued at NZ$1,000 or less (excluding GST), such as books, clothing, cosmetics, shoes, sporting equipment and electronic items. Goods sold for more than NZ$1,000 will continue to be taxed by Customs at the border as they come into New Zealand.

Alliott Group’s global tax news in one monthly digest

Asia Pacific Tax News

BJP pledges to revise income tax brackets if re-elected

India’s ruling BJP party says it will revise income tax brackets if re-elected in the seven-phase general election, starting from 11 April. “We are committed to further revise the tax slabs and the tax benefits to ensure more cash and greater purchasing power in the hands of our middle-income families,” the BJP said in its election manifesto.Times of India

Alliott Group’s monthly global tax digest for March

Welcome to March’s edition of TaxPulse

Asia Pacific Tax News

China unveils $298bn tax cuts to boost growth

Chinese number two Li Keqiang has outlined plans to cut billions of dollars in taxes in order to boost the world’s second-largest economy. Mr Li told 3,000 delegates at the National People’s Congress that China would aim to deliver nearly 2 trillion yuan ($298bn) of cuts in taxes and other company fees. A value-added tax for transportation and construction sectors will be reduced from 10% to 9%, and VAT for manufacturers will fall from 16% to 13%, he said.BBC NewsSouth China Morning PostChina Daily

Asia Pacific Tax News

China tax cut package to stimulate economy

China will cut value-added tax rates for selected industries and provide tax rebates for others as part of its efforts to boost a slowing economy. Government officials said they would cut taxes “on a larger scale” in order to boost business activity. JPMorgan Chase & Co. economists estimate the total impact of the tax cuts will be around 2trn yuan ($300bn), or 1.2% of GDP. Tax cuts for graduates and low-income workers have also been announced in a stimulus drive to fend off the effects of the economic slowdown. Companies which hire people designated as “needy” will also qualify for a tax deduction of 6,000 yuan per person per year for three years.Financial TimesBloombergChina Daily

January TaxPulse by Alliott Group

ASIA PACIFIC

Chinese leaders promise tax cuts to boost flagging economic growth

China’s top economic policymakers promised more tax cuts and increased funding for infrastructure at a key annual planning meeting last month, as US tariffs and weakening domestic consumption added to downward pressure on growth. China’s economy slowed to 6.5% year-on-year growth in the third quarter of 2018. “The pro-active fiscal policy should enhance efficiency, implement larger-scale tax cuts and fee reductions, and substantially increase the size of local government special bonds,” state news agency Xinhua said in a translation provided by Reuters.CNBCFinancial TimesSouth China Morning Post

Report reveals biggest headaches for global mobility professionals

Alliott Group’s Global Mobility Services Group is one of the co-sponsors of the recently published ‘2018 Managing the Global Mobility Function’ benchmarking study published by the Forum for Expatriate Management.

E-Commerce and the Special Scheme for Distance Selling

According to a study conducted by the CRR (Centre for Retail Research), e-commerce generated net sales of €232.6 billion in Europe and Poland in 2016 and €265.7 billion in 2017.

In 2018, this market should exceed €300 billion. Although it proves a fantastic opportunity for online sellers, e-commerce can also be the source of significant tax risks, particularly VAT. Mickael Tatayas, Head of Alliott Group’s VAT/Indirect Services Group, explains the state of play in Europe and provides scenario examples.

Taxing the digital economy fairly

David Gibbs, corporate tax partner at London accounting firm Alliotts (and chair of Alliott Group’s International Tax Services Group) explains in this short report that the OECD and the European Commission (EC) have both issued publications with their respective latest analysis and proposals to tackle the issue of taxing profits and income earned from within the digital economy.

So where are we now in terms of concrete proposals? Read David’s views below.

Wayfair: Could the US Supreme Court decision open Pandora’s Box across the globe?

In the case of South Dakota vs. Wayfair, the United States Supreme Court may have opened a Pandora’s Box of tax compliance problems around the world as states seek to collect taxes they believe are due to them.

Alliott Group colleague Daryl R. Petrick of Californian accounting firm Bowman & Company, LLP, explains the decision and the potential reverberations for domestic and international retailers.

Cristiano Ronaldo and foreign high net worth individuals

Cristiano Ronaldo’s summer switch to Juventus has sparked debate about not only sporting performance and statistics, but also the fiscal implications of his transfer to the club. In particular, Cristiano’s move has drawn attention to the optional tax regime for new residents in Italy. Find out more below in this article from partners Giorgio Marcolongo and Paolo Bifulco, a version of which also appeared in a recent copy of Rolling Stone magazine.

Although due date for CRS & FATCA disclosures has passed, NZ IRD still accepts late submissions

Financial institutions needed to report information about foreign tax resident financial accounts to us for the year ending 31 March 2018 by 30 June.

This is an annual obligation to comply with the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) legislation. IRD is due to exchange information internationally by 30 September 2018.

Finance Minister Grant Robertson delivered Budget 2018 to the nation

It’s the first Budget for the Labour-NZ First Government and forms a key part of the narrative around where and how our new Government wishes to recalibrate the longer term destination for the country.

Tax – Reconfiguring the incentives for R&D

In the lead up to Budget 2018, the Government released its proposals to lift research and development (R&D) spending from the current 1.3% of gross domestic product (GDP) to a target of 2% of GDP. The solution put forward is to reintroduce an R&D tax credit regime with effect from 1 April 2019.

The bones of the proposed regime are similar to what we had under the previous Labour government, prior to the regime being repealed and replaced with the Growth Grant scheme administered by Callaghan Innovation. It comes at an estimated cost of $1.0 billion of operating expenditure over four years.

Investors in cryptocurrency need to be aware of tax implications

With all the excitement around cryptocurrency, it can be easy to forget about the taxation that comes along with it.

Cryptocurrency (sometimes known as a virtual, digital, or electronic currency) is a digital asset which is traded and secured using cryptography. Bitcoin, the most widely recognized type of cryptocurrency, has an equivalent value in traditional currency, and is digitally traded peer to peer using a decentralized system referred to as Blockchain.

Australian Tax Office (ATO) transparency regimes and initiatives part of commitment to combat international tax avoidance.

They involve comprehensive exchanges of taxpayer information and the number of jurisdictions they now exchange information with is growing.

The ATO works with the Organisation for Economic Co-operation and Development (OECD), Joint International Tax Shelter Information Centre (JITSIC) and overseas jurisdictions to improve global tax transparency. These regimes and initiatives contribute to ensuring individual and corporate taxpayers pay the right amount of tax in Australia.

Short Report: The New Country by Country Reporting (CbCR) & Transfer Pricing Documentation Rules

This report stems from Alliott Group’s International Tax Services Group meeting in Sydney, Australia where international tax advisors from across the world engaged in a roundtable discussion on Action 13 of the Base Erosion and Profit Shifting (BEPS) Action Plan.

The report provides basic guidance on the CbCR and transfer pricing documentation recommendations, an update on the status quo in different countries and opinions from local tax practitioners.

International Tax Alert

New rules in Australia have imposed an annual vacancy fee on foreign owners of residential real estate in situations where a property is not occupied or not genuinely available for rent for at least six months in a 12 month period.

Australia’s Federal Government recently passed the law to increase the amount of housing stock available for occupation.

UK Chancellor Philip Hammond announced the Autumn Budget on 23 November 2017

6 Key points

London member firm Alliotts referred to the Chancellor’s second budget of the year as ‘A Budget for Building the New Economy’ and drew attention to the Government’s commitment to further investment in technology, incentives for knowledge-based companies and funding for the development of construction skills to plug the skills shortage.

Changes will expand Australia’s GST base

Australia’s Goods and Services Tax (GST)* rules on the import of goods into Australia will change 1 July 2018 as Australia continues to modernise its tax rules to make them more applicable to new business models being used in the digital economy.

Australia’s GST rate is 10% and a business is required to register for GST if its actual or anticipated sales over the next 12 months exceed $AUD 75,000.

On 9 May 2017, Australia’s Federal Government announced substantial changes to the rate and threshold of its Foreign Resident Capital Gains Withholding (FRCGW) regime which has been in force since 1 July 2016.

Alliott Group member firm BRH Lawyers in Brisbane explain the changes and what foreign residents purchasing property in Australia need to be alive to.

How to know when and where the tax line has been crossed

In our update, members of Alliott Group’s International Tax Services Group provide information explaining what permanent establishment (PE) means and describe the typical triggers that can lead to a company creating this (unwanted) taxable presence in a foreign country.

The Common Reporting Standard (CRS) has real implications for expatriates and individuals with assets held overseas.

Get our experts’ simple guide to what you need to know.

A clear signal that Britain is open for business

“My ambition is for the UK to be the best place in the world to start and grow a business. In 2010, Corporation Tax was 28%. From April this year, it will fall to 19%, the lowest rate in the G20. In 2020, it will fall again to 17%, sending the clearest possible signal that Britain is open for business.” – Philip Hammond, UK Chancellor of the Exchequer.

To accompany the changes in the tax laws from 1 October 2015, the IRD has now introduced new IRD number application forms for non-resident/offshore non-individuals (IR744) and non-resident/offshore individuals (IR742).

These require far more detailed information to be supplied than previously. Key changes are as follows: